Tanzania’s signing of the host agreement for the East African Crude Oil Pipeline (Eacop) was big news for the corporate segment of East Africa’s economy.
For ordinary folk, however, a more significant story might have been the confirmation that Tanzania had finally joined the East African Network Area, a regional initiative that harmonised and reduced roaming charges for subscribers to the region’s telephone networks.
Both events represent significant developments for the region. Rather expected, Tanzania’s signing of the Eacop host agreement puts the final chips in place for unlocking Uganda’s petroleum sector. Less expected, Tanzania’s activation of the One Network Area (ONA), reduces the cost and facilitates near seamless communication for citizens across five of the six member states of the regional bloc.
Initially starting as an initiative of the Northern Corridor member countries, the ONA is near magical from the user end. Besides locking in the roaming tariff at just $0.1 back in 2015, without having to do anything to their phones, subscribers can enjoy value added services such as mobile money at no extra cost. In real terms, the roaming tariff has since come down because it has not been adjusted to compensate for currency depreciation.
Coupled with the acceptance of national identity cards as travel documents across national borders, the ONA has opened up the regional economy in unexpected ways.
On Uganda rural roads, it is not unusual to see a Kenyan trucker looking out for a man frantically waving a phone by a heap of pumpkins or sacks of maize grain. Thanks to affordable telecommunication services, producers and consumers are now enjoying fairer prices for farm produce. Tanzania’s coming on board deepens this process and promises even more gains for farmers.
Although Dar announced way back in January that it would be joining the network, credit still goes to President Samia Suluhu for getting things finally moving. Tanzania is coming on board more than six years after Kenya, Rwanda and Uganda dared the unknown. That translates to six years of lost opportunity and deferred benefits for citizens.
President Samia now needs to go the extra mile and open up Tanzania to regional travel by accepting national IDs as travel documents. This will not only be a boon for regional tourism but an imperative if citizens are to benefit from free movement of labour and other factors.
There are beneficial lessons from the ONA deal that should inform policy. The initiative took a staggered road to implementation because of discordance in telecoms sector tax policies. Until these were converged, the differences in domestic tariffs created a situation that encouraged revenue leakage through illicit termination of international traffic. Uganda was — and is still — a victim of the practice called Sim-boxing, because it still has higher domestic tariffs relative to neighbours.
Regional integration has often been hobbled by the fear of the unknown. The ONA has demonstrated that even where risks are real, they are not insurmountable. Tanzania’s experience with it will not be without shocks. Initially, Dar’s telcos will see a dip in revenues from roaming tariffs. But this will only be transient and will correct as user volumes grow.
With Tanzania crossing the proverbial Rubicon, attention now shifts to Burundi, which is now the only man out of step.